AustralianSuper says possible Glencore listing on ASX would be positive

By Helen Clark and Melanie Burton

PERTH, May 27 (Reuters) – Pension fund AustralianSuper on Wednesday said if Glencore decides to list shares on the Australian Securities Exchange, it would be “positive” for both the bourse and the Swiss-based commodities trader and miner.

“If they were to list here we think it would be positive for Glencore and for the Australian stock exchange,” AustralianSuper portfolio manager Luke Smith said at the Australian Financial Review mining summit in Perth.

The move would suit Glencore because “we believe the Australian share market is the best and most informed mining share market in the world,” Smith said, which would offer its shares a better chance to reflect the company’s worth. He added the fund had discussed the topic with Glencore and a listing on the ASX would offer more choice to investors such as itself.

Glencore has said it is open to considering a secondary listing in Australia.

Glencore and Rio Tinto earlier this year explored a possible merger that would have forged a $240 billion company, but Rio walked away saying it could not see sufficient cost advantages. There is speculation that Glencore is still interested in a tie-up.

Some mining CEOs like Glencore CEO Gary Nagle have argued that the industry needs to grow in size to become more relevant and influential – and to attract interest from a wider audience.

Smith said AustralianSuper was cautious about mining companies getting bigger because even if a large company emerged, “it’s still not going to be anywhere near the major tech companies.”

“We always approach cautiously, M&A, and if we can see it’s going to create value, we’ll be open-minded about it,” he said.

BlackRock portfolio manager Olivia Markham earlier said that she saw merit in “sensible” M&A as a way for miners to grow and attract generalist investors to fund large and complex projects.

“Australian Super has got a bit of a track record of sometimes saying yes and sometimes saying no, but it’s all about not looking just to this transaction and instant gratification of maybe a share price rise of 20% or 30%,” Smith said.

“We’re always looking for three to five years. What is the company’s … intrinsic worth in three to five years’ time? And is this appropriate price being paid today?”

(Reporting by Helen Clark in Perth; Editing by Christian Schmollinger and Thomas Derpinghaus)